futures

Just when it appeared the May Nymex contract was in a positionto resume its upward ways, the contract duped hopeful bullishtraders by falling 4.2 cents to $2.479 Thursday. Perhaps moreimportant than the magnitude of the loss is that May failed to moveabove resistance at $2.56, and that the contract spent time belowits significant $2.465 level for a time Thursday before recoveringduring its final half hour of trading.

The May Nymex contract continued to slowly rebound from itsmassive price downturn on Monday by closing Wednesday up another2.0 cents at $2.521. Trading was held to an extremely tight range,as the spot month could only post a high of $2.555. Total volumewas estimated at 255,671 contracts.

The futures screen “fell like a rock” Monday and, of course,cash prices then had to do likewise, said a Gulf Coast producer.Some points were essentially flat, such as Northwest (both domesticand Sumas) and NorAm-east. Others dropped 2-9 cents, with declinesof a nickel most common. Activity was fairly light, especiallysince some traders hadn’t returned yet from the holiday weekend, amarketer noted. But what prices lacked in volume they made up involatility as a number of points saw double-digit ranges. Onesource said his Chicago deals went from $2.64 early on to $2.49 atthe end.

Cash numbers were softening as expected Thursday, following theprompt of the futures screen’s late downturn Wednesday. But itlooks like it’s already time to reverse field again and head upwardtoday based on the screen’s strong gain Thursday, sources said.

The May Nymex contract continued its strong charge higher onThursday, reaching a high of $2.605 before ultimately settling up6.1 cents at $2.562. More impressive than the increase, however,was the estimated volume figure. Coming on the heels of Wednesday’shigh trade volume, Thursday saw over 100,000 contracts tradinghands. This leaves little doubt speculators played a role in May’srise yesterday. Even though current Henry Hub prices are 15-20cents lower than that, the current heat wave is waking people up tothe possibility of extreme air conditioning demand this summer, ananalyst told GPI. “The supply/demand balance has been so tight forso long, that his extra demand is highlighting potential problemsthis summer. There are already problems with coal delivery inTexas, and if that continues into the summer, watch out,” he said.

The May Nymex contract lost 2.1 cents to $2.501 Wednesday amidone of the most active non-expiration days in exchange history. Anestimated 93,649 contracts changed hands, many of which were tradedafter May fell back from its new all-time high trade of $2.56. “Mayhad pretty good resistance at $2.58, but I think funds were anxiousto take profits,” an analyst told GPI.

The April Nymex contract went off the board in bearish fashionon Friday as the spot month fell 3.8 cents to conclude its tradingat $2.300. A broker noted this was as “boring” a settlement day ashe could remember, probably because low volatility last week gavetraders ample opportunities to get out of their positions beforeFriday, he said.

The April Nymex contract returned to its recent habit of tightdaily trading ranges Tuesday by containing its movements between$2.295 and $2.345. That tight range only allowed April to lose 2.1cents for the day to $2.330, despite the fact that nearly 60,000total estimated contracts changed hands.

The April Nymex contract gained another 6.1 cents to $2.300 onThursday, as the contract continued to move higher following thebreakout from its recent technical trading range. Despite thestrong rally and heavy estimated volume of 72,113 contracts, theupsurge stopped just short of breaking through its next resistancelevel at $2.305.